Simultaneously buying your next house while selling your current one can feel risky when your equity is tied up. In this episode, Judy Jernigan teams up with mortgage expert Derek White, known as the “Buy Before You Sell Guy,” to explain how homeowners can bridge the financial gap. They discuss creative financing options, niche lending programs and the practical steps needed to secure your dream home without contingent offers or rushed timelines. Judy encourages Atlanta homeowners to schedule a consultation or home valuation to begin planning.
How buy‑before‑you‑sell programs work: These programs are designed for homeowners who need to sell a house to purchase their next one. Instead of including a home‑sale contingency, they leverage equity through bridge financing and remove the existing mortgage from debt‑to‑income calculations.
Pros and cons of bridge loans and niche lenders: Judy and Derek compare lenders such as Knock, Up Equity, HomeLight and Calque. Each company offers unique features-some provide guaranteed offers on your existing home, others simply free up your equity. Understanding timelines, fees and qualifications is essential.
Debt‑to‑income considerations: Programs can temporarily exclude your existing mortgage payment from underwriting, making it easier to qualify for a second loan.
Recasting mortgages: If you can qualify for two mortgage payments, Derek explains how you can buy the new home first, then apply the proceeds from your sale toward the new loan and request a recast. Recasting adjusts the principal and interest portion of your payment without changing the interest rate.
Hidden costs and benefits: Derek outlines the typical fees-ranging from 1.5 % to 3 %-and explains how these costs can be offset by getting your offer accepted quickly and presenting a staged, vacant home for sale.
Derek White is a mortgage loan originator specializing in buy‑before‑you‑sell programs. He evaluates proposals from multiple lenders-Calque, Up Equity, HomeLight and Knock-to match clients with the right solution. His guidance includes explaining how each program works, identifying potential hidden fees and helping clients decide whether they should qualify for two mortgages or use bridge financing.
Contact Derek at [email protected] or (678) 778‑2921 to explore your options.
Metro Atlanta program overview: Judy and Derek explain how buy‑before‑you‑sell programs operate in the Atlanta market, highlighting success stories and cautionary tales.
Bridge financing vs. HELOC vs. guarantees: Not all programs are equal. Some require a home equity line of credit, others provide a backup contract on your current home. Derek breaks down the pros and cons.
Debt‑to‑income ratios: Listeners learn how lenders view dual mortgages and why certain programs remove the departing home from calculations.
Mortgage recasting: Derek explains how recasting can reduce monthly payments after you sell your old home.
Program costs and timelines: Fees vary but can often be recovered through a stronger purchasing position and the ability to stage your former home for a higher sale price. Most programs allow four to six months to sell your existing home.
Selling and buying at the same time can be nerve‑wracking. By understanding buy‑before‑you‑sell programs, you can:
Strengthen your offer: Removing a home‑sale contingency makes your offer more competitive.
Stage for success: Moving into your new home before listing the old one allows for cleaning, staging and showing it at its best.
Gain financial flexibility: Bridge financing and recasting free up cash so you aren’t forced to accept a low offer out of desperation.
“Buy Before You Sell Programs: Moving Made Easier for Homeowners” – Judy and Derek lay out the fundamentals of BBYS programs, highlighting bridge financing, debt‑to‑income solutions and guaranteed offers on your current home. The article explains why these programs make your offer stronger and can improve your sale price.
“Costs Associated with Buy Before You Sell Programs” – Derek White breaks down different financing plans. Plan A involves qualifying for two housing payments and recasting your mortgage; Plan B uses a home equity line of credit combined with a backup contract; Plan C combines both and may cost 2.5 % – 4 % of your current home’s value.
The How to Sell Your Atlanta Home with Sage & Grace podcast covers many homeowner challenges. Consider listening to:
Episode 18 – “Overwhelmed by Stuff? A Stress‑Free Estate Sale Plan” (how professional estate sales help you declutter and get market‑ready).
Episode 15 – “Don’t Sell Empty: How Staging Creates Value” (practical staging tips for occupied homes).
Episode 12 – “104 % Fast: Sellers Share Exactly What Worked” (case study of a sale that attracted seven offers in 36 hours and sold for 104.3 % of list price).
Episode 10 – “Avoid a Surprise Tax Bill When You Sell” (proactive tax strategies for sellers).
Schedule a consultation: Calendly
Website: Sage & Grace Realty Group
Get your home valuation: Home Valuation Tool
Judy’s commitment to her clients has earned her more than 75 five‑star Google reviews. Here’s what one recent buyer had to say:
“I highly recommend Judy and the Sage and Grace team. Judy helped me with the purchase of a new home in Tucker. She stayed on top of everything and kept me up to date on the offer and closing process. With her help I was able to close quickly on my new home.” – Cara B.
Judy’s proactive communication and expert guidance ensure that even complex transactions-like buying your next home before selling your current one-are handled smoothly. Reach out today to start planning your next move.
Transcription:
So you own a home and you're ready to move. You want to buy another home, but you aren't sure financially how to swing it. How to buy a home and sell a home all at the same time.
Maybe you need more space. Maybe you're ready to downsize or you're relocating to a different area. You want to sell one home, buy another home, but you just don't have the cash on hand to just go buy another house.
So what do you do? Are you afraid of juggling a lot of moving pieces? Well, don't be. Selling a home isn't just about putting up a for sale sign. It's about strategy, marketing, and negotiation.
But how do you know if you're making the right moves? I'm Judy Jernigan, recognized among the top 5% by the Atlanta Realtors and your host of How to Sell Your Atlanta Home with Sage and Grace, smart homeowner strategies, successful real estate sales. With a background in broadcasting, negotiation, and education, I bring a unique perspective to home sales, helping homeowners sell faster for top dollar and with less hassle while understanding not just the financial side, but also the logistical and emotional considerations of a move. This show helps you plan ahead, navigate the market, and work more effectively with a realtor like me.
You'll get expert insights from my guests plus real actionable strategies to sell with confidence. Now here's the show moving you forward with Sage advice and grace. Hi, I'm here today with Derek White, the buy before you sell guy.
Welcome. So we're going to talk today about niche lenders, programs that are out there to help people exactly this situation. And it is something that these lenders saw a need in the market and filled it.
And likewise, you saw a need in the market to help people understand the different programs that are available and are filling it by doing just that. But first, before we dive into the whole buy before you sell niche programs, can we talk about what some of the traditional, if you will, options are for a person who wants to buy and sell all at the same time? So the best traditional option would be for a client to go ahead and purchase the new home without selling their existing home. And that's making the assumption that they can come up with down payment.
They don't need to tap into the equity in their current home in order to purchase the new home. And also that their debt to income ratio will hold both mortgage payments. For clients who are able to do that, that's going to be the cheapest, probably less expensive option available out there.
Once they purchase the new home and then say their old home sells a few months later, they can take the proceeds from that sale and they can put those proceeds towards the principal balance on the mortgage for the new home they bought and do what's called a recast. It's R-E-C-A-S-T. It costs about $300 to do that versus doing a refinance, which would be thousands of dollars.
The client can do a recast. Their principal and interest payment will be adjusted based off of the new lower principal balance. The rate doesn't change.
The term doesn't change, but that's the ideal scenario and a traditional scenario where you don't need a third-party buy-before-you-sell company. So I guess I should back up a bit. First off, if you can pay cash for your next home, for your second home, by all means, that's going to be the easiest option.
Perhaps second and more common is, let me just make sure I understood what you were saying, is if you're planning to get a conventional home for a conventional loan for your next home, you want to put down at least, are we looking at 3% for conventional loans? 5% in this case because it's not a first-time home buyer. The client already has a home, so the minimum down payment is going to be 5%. So 5% of the purchase price towards your down payment.
And then you also need to be able, according to your mortgage lender's guidelines, be able to afford to have two mortgages at the same time. And the way that a mortgage lender is going to evaluate whether they think you can afford to have two mortgages at the same time is what the term you used, debt-to-income ratio. Can you talk briefly about what debt-to-income ratio means? Yeah.
So for a client, if they make, let's say $10,000 a month gross income, so pre-tax, then their debt-to-income ratio, the maximum for a conventional loan is 50% of that. So $5,000 encompasses, in this case, both mortgages and any consumer debt that shows up on their credit report, car loan, credit card, anything like that. So their total monthly debt cannot exceed $5,000 in this scenario.
So 50% of the gross income. So if you're able to have two, in your example, you have two mortgages because you're owning two homes for hopefully a short period of time. All of your debts combined, those two mortgages plus student loans, plus car payments, plus credit card bills cannot exceed 50% of your gross monthly household income.
So that's not possible for a lot of people. And even if it is possible for people, they're not comfortable with that sort of situation and having to spend that much cash every month for two mortgages. So this is where these niche lenders, buy before you sell program, came about.
And I think they can be such a good option for people to consider, but they're confusing. There's a lot of different companies now that have gotten into this space and it's something that I definitely try to keep up with and learn more about, but they get a little bit complicated and they change their guidelines and their rules. So I am thankful to have someone like you to help me through it.
So what exactly is a buy before you sell program from basic level? Yeah, so high level for clients who have a home that they need to sell prior to purchasing a new home. These programs will make the client much more competitive on their offers by eliminating the need for a home sale contingency to be included with that offer. What these programs will do is provide bridge financing for the new home purchase, for the down payment.
The bridge financing is calculated based off of the equity that the client has in their current home. So some percentage of that equity, these programs will free up in order for the client to use that for down payment on their new home. That's one aspect of it.
The other aspect of it is the debt to income ratio issue. So these companies will put a backstop or a backup offer on the client's current home, the one they're selling. And in that case, the underwriter for the new home purchase does not have to include that old home in the debt to income ratio for the new home purchase.
Because it already has an offer on the table? Right. Fannie Mae and Freddie Mac do not require that that old home be sold, just that it have a binding offer on the home free of any contingencies. So no financing contingency, no appraisal contingency, no contingency at all.
If it meets that criteria, which that's what these companies will do, then the underwriter only has to qualify the client based off of the new home mortgage. So two key aspects there. Essentially, these 540 sell companies will bridge the client from the current home to the new home.
And then depending on which company you go with, there's either a 4-month or a 6-month window in which the client has to get that old home sold. So that's a high-level overview of how it works. So I've sometimes heard it described as you work with one of these companies and they, well, again, they're all a little bit different, but they will buy your next home or help you buy your next home.
Well, I guess some of them buy your next home for you. Is that right? That is. Any company that gets involved in the buy side of the transaction is not the company that I work with.
I only work with companies that secure that departing home in order to free the client up to make the new home purchase. So that's what you were saying. So the two pieces, they're going to see how much equity you have in your existing home, help you make a loan or make a loan so that you can use that towards your down payment.
Go ahead and buy your next home. Meanwhile, you mentioned the backstop offer. They've made an offer on your existing home so that you meet these federal guidelines or Fannie Mae, which some people aren't familiar with.
Maybe we should describe Fannie Mae real quick. Well, and let me say it's not a backstop offer. I think I use that term on this boat.
It's a bonding contract that serves as a backup offer. But again, these programs don't work with FHA because FHA requires that the old home be sold. They don't have that same Fannie Freddie guideline that just requires that the house be under contract without contingencies.
Okay. I didn't know this nuance. That's really important.
So you have a contract to sell your home, though you probably don't intend to use it because it's not probably as much as you're going to be able to get when you list it and sell it on the open market, which we can talk about. But this helps you qualify for getting the loan on your next home by reducing those debt to income rules. Yep.
If your debt to income ratio cannot hold two mortgage payments, then it eliminates the departing home mortgage from the equation. What I love about this is it can help you get a better deal on the home that you're buying because you don't have a home sale contingency. And it can help you get a better price for the home that you are selling because you've potentially been able to move out, move into your new home and get the home that you're selling cleaned up, maybe staged, put the best foot forward for that home.
So you're going to be able to get a better price for the home that you're buying. You're going to be able to get a better price for the home that you're selling. And those costs, savings and cost earnings could very well offset the fees of the program.
That's exactly right. That's exactly how a lot of these companies will package this when they're to you about it. Being able to sell and stage a home that's vacant and not have to coordinate showings around kids and dogs and all that kind of stuff will help a seller sell a home quicker and at maximum value, ideally.
I should explain a home sale contingency. That is an option that we didn't talk about. Of course, you can pay cash for a home.
You can do this where you carry two mortgages. You can try to, and I have done it, buy a home and sell a home all at the same day or within a few days of each other, have closings that are back to back. That is an option.
And that often comes with a home sale contingency. And it depends on how hot the market is. If it's a buyer's market, a seller's market, how competitive the property is.
We have seen in the local Atlanta real estate market that it has been hard to get offers accepted if they have a home sale contingency. But it's not impossible. It depends on a lot of other factors.
What is a home sale contingency? It is when a home buyer says, I'm making an offer on this home. I want to buy it. Here's the purchase price.
But I need to sell my current home before I can close on this one, full disclosure. And should something go awry and I not be able to close on my existing home, then I can get out of this contract and get any sort of deposit back. And so that's a lot of risk for a home seller to take.
So those offers are understandably a little bit harder to get accepted. So what are the typical costs associated with a buy before you sell program? So there's a range. So the ideal situation, seller contacts you and then you get me involved early in the process before the house gets put on the market.
So if you have a client who has two or three weeks that they can wait and kind of put things in place. And when I say that, what they're going to ultimately do is get a home equity line of credit against their current home that's going to serve as the bridge financing for the new home. For that type of situation, there's a company out there that just does the backstop contract on their current home.
So a equity line of credit might be $1,500. And depending on the price point for the home that they're selling, this company that does the backstop offer might be another 4,000 or so. A home equity line of credit is something that a homeowner can get from just about any lending institution.
But the difference with some of these, what I keep referring to as niche lenders, and we'll name names in a few minutes, is that they're going to add that binding contract to the mix. That seems right. So looking at the scale of it, to answer your question, I did a pricing scenario with all of these different companies that we work with.
The scenario was a home being sold at 500,000, new home purchase at 700,000, with a bridge loan of 200,000. So that was the scenario. And I ran the pricing through each one.
On the least expensive end of that, it was roughly $8,000. On the most expensive end of that, it was $18,000. So you might say, well, why in the world would anyone do the option of $18,000? And it's a good question.
With the less expensive one, that's the one where your house cannot be up for sale, cannot have been listed within the last six months. So there's different criteria for each of these programs that a client may not be able to meet. So if someone comes to me and their house is already up for sale, listed for sale, and they're ready to make an offer tomorrow, they're not going to qualify for that $8,000 option.
Because the bridge loan lender is taking on a bit more risk. They will not lend. You cannot get a HELOC on a house that's already listed for sale.
So ideally, you and your client are going to get me involved on the front end. To help weigh all the options. Right.
Help weigh all the options. And if we have two to three weeks lead time, then we're going to go get that equity line of credit. At the same time, putting things in place with this company that does just that backstop offer.
That two or three weeks lead time could save, in the scenario I gave you, $10,000 as far as these costs go. Where the most expensive one comes into play and is relevant is that they'll offer this program on properties and scenarios that really no one else will. Like a condominium or a rural property.
There's all kinds of scenarios where some of these companies have a very small box that they will lend in. Whereas that company on the more expensive end has a much wider buy box, is what we call it. They'll offer this program in scenarios that nobody else will.
So with the differences in fees, where you mentioned if your home is already listed for sale, no lender will give you a HELOC, a home equity line of credit. None that I'm aware of. But there are ways to still get a bridge loan? If the house is listed for sale, yeah.
Then right there of the four companies we work with, we're going to eliminate one of those right there. But there's still three others that we'd run the scenario through and get pricing and get a proposal and would not be off the table just because the house is listed for sale. So you have at least five companies, you keep your finger on the pulse of how they're doing things and what fees they charge.
I know they change regularly. Tell us how you are affiliated with those companies. I'm not directly affiliated with any of them currently.
I use those programs. I leverage those programs. What I do is I'm a mortgage loan originator.
So I leverage those programs in order to get the opportunity to increase my mortgage origination business. It's a customer service that you provide. That's exactly what I do.
Loyalty to any of the particular companies, which I love that. So you're giving us an impartial evaluation of what the options are just to help better serve our clients. It's a free service that I offer.
I'll get basic information about your client, the home they're selling and the price point of the home they're buying. I don't need social security numbers, date of birth, anything like that. Just general information.
And what I do is I will run that scenario through all four systems. I'll get within 24, 48 hours, I'll have proposals from each of those companies. And then from there, I'd like to pare it down to the best one or two proposals.
I'll present that to the agent and also to the client. And that would be going over on a high level, going over how much, okay, this is how much they're going to free up for you for the bridge loan financing. This is how long you have to sell your house.
I want you to buy your new one. Things like that. Hidden fees.
I try to uncover all of the things that the client isn't necessarily going to be asking about. Yeah. Everything they need to know to make an informed decision for themselves and their families.
So let's name names. What are the companies that you help us evaluate? So Kalk, K-A-L-K-U-E. They're newer to the scene.
It's very new. They are the company that does not do bridge loan financing, but they will do a backstop contract against the home. So that's the scenario where the client cannot have their house listed for sale.
They'll get a HELOC through their bank or I also have contacts, banks who will do HELOCs that serve as the bridge financing. Kalk is the least expensive of those four options. But again, that was a smaller buy box.
Their niche is to say, we will guarantee that we'll buy your home should you need us to. And it helps check that box that you have a contract, a binding contract on your home, even though you probably don't intend or hope to actually sell to them. Okay.
That's right. Interesting. Worked with UpEquity.
That was the company that was on the higher end in not all cases, but some cases cost-wise, they've got the big buy box. I actually used to work for UpEquity for two years. I was a business development rep from 22 and 23 with them.
So I know that product very well. But no longer affiliated. No longer affiliated anyway.
I do not get paid, I get no kickback, nothing. But the knowledge and experience that I have with these programs, and I know that there's a need for these programs in the market. That's why that's a big part of the business that I do as far as the origination goes.
Kalk, UpEquity. HomeLight. HomeLight.
Very good option. And Knock, who's probably been around longer than anybody in this space. So we work with them as well.
So those are the four. And then there's a fifth one that may be coming to the market. I don't know for sure, so I don't want to mention any names.
Okay. Is Ribbon still around? I think so. I don't know.
They were a player in the space. This was three, four years ago. Right.
Ribbon and HomeWord, they're companies that get involved in the buy side. With the buy. Buy your next home and rent it back to you.
So that's a different option, a different conversation. And I don't, because we are handling the financing, the mortgage on the purchase transaction. I don't get involved with, I don't want, those companies can kind of get in the way with some of their overlays and their processes that slow that purchase transaction down.
And so I don't work with them. So I meet a homeowner who is ready to buy their next home. They do have a home to sell.
I'm going to put them in touch with you. You're going to get to know them and their situation and find out if they can swing things just as it is traditionally, conventionally, or if they need one of these niche programs with the bridge financing. And your ultimate goal is that you hope by providing them lots of knowledge and good customer service, that ultimately when they do buy their next home, they'll get the mortgage with you.
That's exactly right. I offer this free service. And what I ask for in return is the opportunity to compete for your mortgage.
I'm not asking for any promise or guarantee. Just give me the opportunity to compete with a mortgage. And what I'll say is if I am doing the mortgage, then the process from there to closing, I act as a liaison between these third-party companies and the client and the agent.
These companies, not all of them, but their customer service could be better at times. So I help with that, help smooth that transaction, help smooth that process. And again, uncovering those potential landmines, like hidden costs and things like that, they all have them.
And I know kind of where the landmines are. And so I help smooth out that process to the closing. So you mentioned condos earlier.
What types of properties are best suited for this type of bridge financing niche situation? Properties that are in, not urban areas, but not out in rural areas, that are within the city limits or inside. With Atlanta, it'd be the greater Atlanta bubble. That would be ideal.
Ideally, a single-family residence, although there are some companies that will do condos. Ideally, it's a primary residence that the client is going to be selling, although companies like UpEquity will do an investment property. Again, sometimes UpEquity is the only option, but they serve that purpose.
They can get a client who's stuck trying to do things the traditional way, get them unstuck and get them to the finish line. It certainly serves a purpose. It's not a one-size-fits-all.
I tell people that all the time, but it's certainly worth investigating on the front end and weighing out the costs and the benefits. What happens, I think people are going to be wondering, if the home that they bought their next home with this bridge loan, what happens if their old home doesn't sell as quickly as they hoped? Great question. All right, so we're talking worst-case scenario, which your clients will ask.
I'm going to talk about each of the companies in general, other than NOC. I'll tackle NOC in a second. UpEquity gives the client six months to sell after they buy the new home.
HomeLite gives four months to sell, and then Calc gives five months. Okay, so what happens at those deadlines, whatever company you end up going with, so let's just say it's UpEquity. Six months after your client purchases their new home, their old home has not sold yet.
UpEquity will then move in and purchase the client's old home at the specified price that was laid out and disclosed on the front end. In that binding contract. In that binding contract.
It might be 85% of list price. Let's just say that for now, of whatever the list price was on the front end of the transaction. They will purchase that home at 85% of the list price.
With that transaction, they'll get paid back their bridge loan or their equity advance. They'll also pay off the mortgage for the client's old home. If there are any proceeds left, then the client will receive those proceeds.
But it's a two-step process, so I know what you're thinking already. These aren't iBuyers, so the client's not coming in and taking a 15% haircut. What happens is- Not super lowball offers.
Yeah, I mean, it's not. Ultimately, the client's going to get full market value with each of these companies except for NOC. So what happens is once, again, we're talking about UpEquity.
Once UpEquity purchases a home at 85%, then you as the agent will relist that property to be sold a second time. And the reason you have to relist it is because it's a different seller. So it's a technicality, but you have to relist it.
So that home will then sell a second time at full market value, whatever that is. Most we can get on the market. The market will determine that.
UpEquity does not determine that. From there, the agents with that second sale, full market value, agents will get paid their commissions. And then depending on the company that you're going with, there may be some carrying costs that accrue.
But whatever is left over once the costs are paid from that second sale, the client will get a second round of net proceeds to match the first round that they got. And then the combined of which will equal full market value. Obviously, less the cost involved, agent commissions, and if they're going to be carrying costs.
That seems pretty fair. Yeah. Ultimately, the client's going to work their way up to full market value.
It does get more expensive once you cross that threshold of however many months that the company allows. So as with any home sale or listing, you want to price it correctly, fairly, out of the gate, don't have it sit on the market a long time, let's get it sold. What I tell agents when I'm talking about this program is if the client's home has not sold 90 days after they buy the new home, that's probably a good time to have a conversation with your client about list price.
Again, we don't dictate- All those things, showing conditions. So these niche lenders, they are not eye buyers, as you call them. They really don't want to buy your home.
They're not interested in gobbling up real estate. That is not what their business model is. That's a relief to hear that that's not their end game, their goal at all.
It is not, except when talking about NOC and these programs change all the time. This is based off NOC's guidelines the last time that I looked at. Yeah.
With NOC, at the end of that six months, they give you a six-month window to get the house sold. At the end of that six months, you don't have the two-step process. NOC is going to purchase that home at 80% of the list price, the lowest list price throughout that six-month period.
So in that scenario, your client does take a 20% haircut. Ideally, for that program, NOC, if we're going to steer a client that way or open up that avenue for them, you want to be pretty sure that that's a property that's not going to be sitting on the home. I'm sorry, on the market.
So for context, at the time of this recording, homes in Atlanta have been going under contract on average in about 32 days. So there is still a lack of inventory in Atlanta, and if you have a home to sell, we are able to get it sold the vast majority of the time within a month or two. If it needs some work, it doesn't show well.
But these all giving us four or five, six months, that should be plenty of time. And again, I'm talking worst case scenario. It does not happen very often, but yeah, it's important to understand it.
What other risks or downsides should homeowners be aware of? Nothing that we have not covered already. I mean, obviously the cost risk-wise is getting to that period, whether it's four months, five months, or six months, depending on the company, and then additional costs being involved in that case. But I can't think of any other risks other than that.
That's what you're so good at, is helping people understand how it works, what they gain, what they pay. I love that. So do you anecdotally have a success story you can share with us? Maybe some homeowners who've really greatly benefited from this program? Yeah.
I mean, several. I mean, I spent two years as a business development rep for a faculty, as I said. So yeah, there were several, not one I can think of offhand, but clients who spent months trying to do this selling and buying the traditional way.
Spun their wheels, would get under contract. that contract would fall through because the contingency um just over and over and then we were able to you know uh get them signed up on this program um and kind of get where they were stuck get them unstuck and get them across the finish line and buying that new home um it's again I've been in this market for 25 years um and what attracted me to these programs in general um is that I know that there is a need in this market and probably every major market um for a program like this there are a lot of clients out there who might be stuck trying to do it or they're also a contingency of of clients who don't wanna mess with it they don't want the hassle of they're afraid the fees are gonna be exorbitant right And and it just and they're so confusing if you go to the websites under comparing them and understanding the program so and that's where I come in yeah I will I'll navigate I'll make it put it all in layman's terms as best I can um and and again and this is easy for me to say the fees are not paid out of pocket they are paid basically directly with the equity in your current home doesn't make it any easier to swallow in some cases but um it's not tapping into your cash it's not tapping into your cash you're not stroking a check for you know and that one case is $8,000 or $18,000 but um I love for the purpose yes I love that these um niche leaders exist to fill this need and that you keep on top of how they all work and can help my client understand them so I appreciate you so we didn't really get into this some people think that they have to sell before they can buy yeah they'll walk into this process assuming that they have to sell before buying when in reality they might have access to 5% for down payment either their own funds or gift or combination of both um and they may their destined commercial may hold both mortgages if if that's the case even if they're putting 5% down but ideally they're planning on putting 20 25% down for instance they can go ahead and move forward by the house of 5% down once they sell their old home they can take those proceeds put them towards the principal balance of the mortgage for the new home and do its color recast r ec a s t recast will not only bring your your monthly mortgage payments down in line with a lower principle balance but it will also eliminate mortgage insurance if you had to initially get it when you bought the house because your job payment was only 5% right now that you have 20% down or equity then your as long as you meet that 20% threshold so I'm with the recast with the recast can your interest rate potentially go down no no so so that's the only thing that changes your your loan term stay the same the length of the loan stays the same um your interest rates is the same the only thing that changes is the principal and interest portion of your monthly payment is adjusted to meet that new lower principle balance um it is 250 $300 versus a refinance which did as we know $79,000 spent on the size of the home so the recasts a fantastic option that many people do not know about and the recast has to be done within how many months of that initial closing um there's no limit on on when that recast has to be done you could do it I think the limit is you have to wait at least two months I think to do the recast but after that you can do it and month three or year three or year 13 oh yeah I didn't know that some companies will limit limit to one recast um it just depends on the loan services but everyone that I know at least allows for one which is all you need in the scenario so that way they can go ahead and move forward without having to use any of the niche programs we've been talking about exactly um if they have 20% saved up for a down payment they okay they don't have to use it all right away yeah yeah they can if they have 5% access to 5% they can make that transaction happen and then go back and then the recast will good get them ultimately to where they were planning on being with you know whatever down payment so it's great program it is great program thank you so I'm thinking about this particular couple um they're saving up for a down payment they're probably planning 20% down yeah what advantage would they have moving forward um like even if they had 20% saved I'm thinking that they still may not be able to carry two mortgages because of the 50% rule so that's what they need to understand that maybe there's no point in waiting because you're still not gonna be able to do it in that case if they have the funds but the debts income ratio doesn't work we get calc involved Calc puts the backstop contract on the on the old home for significantly lower feet than what the other ones and that frees them up to make that new home purchase so it's never a bad idea to be saving up but it may not get them where they wanna be which is to be able to buy their next home move into it carry two mortgages for a while they still may not be there
and the downside to doing it the way they wanna do it is weight is values going up yeah are you gonna you know you can you can buy now and realize that appreciation yourself or you can buy down the road and you're paying that higher price so what um where can people find you yep so my cell phone No. 6 7 8 7 7 8 2 9 2 1 or you can email me at buy before you sell guy at Gmail com anything we uh haven't thought about talking about no just again kind of reiterate the the sooner in the process that you get me involved the better the opportunity the client has to get through this process with the least amount of cash uh uh for cost right at the pay the sooner you get involved the sooner you can help them yeah start finding the most cost effective solution to help them buy before they sell that's exactly right thank you thank you Judy appreciate it I am Judy Gernigan the team lead and founder of Sage and Grace Realty Group this is how to sell your Atlanta home with Sage and Grace Smart Home owner strategies successful real estate sells thanks for spending some time with us thanks for joining us on how to sell your Atlanta home with Sage and Grace I'm Judy Gernigan and I love helping homeowners sell smarter with less stress and better results who do you know with real estate questions please connect us so we can make confident well informed decisions and get the best possible outcomes together if you enjoyed this episode be sure to like subscribe and leave a 5 star review it helps more homeowners get the smart strategies they need for a successful sale head to Sage and Gracere.com to learn more about working with me and the Sage and Grace Real Estate team explore all our show episodes
and when you're ready book a chat directly with me Judy jernigan again moving you forward with Sage advice and Grace